Steel stocks with Chinese traders continue to mount

Steel stocks held by Chinese traders as of July 30 totalled 23.1 million tonnes, higher by 129,000 tonnes or 0.6% on week, Mysteel has learned, as against the on-week rise of 122,600 tonnes in the prior period. Mysteel's latest survey over July 24-30 showed that steel demand in North China was firm while that in South and North China was expected to recover in the near future, survey respondents said.

The survey sampled traders in 132 cities monitored by Mysteel on the volume of stocks of rebar, wire rod, medium plate, hot-rolled coil and cold-rolled coil they were holding.

Behind the lift in stocks over the week was the continuing rise in steel production, with output of the five products climbing by a further 82,100 tonnes or 0.8% on week to nearly 11 million tonnes over July 23-29, according to Mysteel's survey.

"Rebar demand from end-users in North China including in Shanxi and Inner Mongolia has been good of late," a steel trader based in North China said, adding that the stronger demand in North China is due to the improved weather.

Yet overall during the week, demand across the country did not see any significant recovery. The daily trading volume of rebar, wire rod and bar-in-coil among the 237 traders across China Mysteel quizzed declined by 4.6% on week over July 27-29 to average 213,578 tonnes/day, Mysteel's assessment showed.

"The financial and commodity markets are not so stable, and some regions have not fully recovered from the flood disasters," a Shanghai-based analyst said. Both factors weighed on stocks, he explained.

"Demand for steel has been delayed in the wet season, but sometime in the near future, we might see demand rise," he ventured. "After all, the scorching weather's influence on steel demand is lighter than frequent rains' effect!"

Over July 24-30, steel inventories held by traders in Mysteel's former smaller sample across just 35 cities also gained by 135,100 tonnes or 0.9% on week to 15.6 million tonnes. The stocks were some 21.6% higher on year.

This article has been published under an article exchange agreement between Mysteel Global and SteelMint.

Photo: World Steel